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Millionaire tax: Smart politics, awful policy

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J. Scott Applewhite/AP

(Read caption) Senate Majority Leader Harry Reid of Nev., meets with reporters on Capitol Hill in Washington after a Democratic caucus lunch. Reid's plan for a 5.6 percent surtax on millionaires isn't a good policy, the author argues.

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Senate Democratic Leader Harry Reid’s plan to fund a $445 billion stimulus, err, jobs bill with a 5.6 percent surtax on millionaires is not all bad. After all, Tax the Rich does make a nice campaign bumper-sticker. But it is mostly bad.

Why? Here are five reasons.

Reid’s bill won’t become law, of course. But that’s the point. Reid wants to be able to say that Republicans blocked a critical jobs bill just to protect their fat-cat millionaire pals. Give him credit for smart politics: By replacing the potpourri of tax increases Obama would have used to pay for his stimulus bill with a simple, easy to understand millionaire tax, the Senate Democratic leader has done a wonderful job clarifying his party’s message.

Too bad it’s such awful tax policy.